How to Ensure Your Dream Property in India is Free from Mortgage Liabilities

Purchasing a property is a significant milestone, but it’s crucial to ensure that your dream home or investment is not entangled in legal complexities, especially mortgages. In India, where real estate transactions are often complex, verifying that the property is free from any mortgage is a vital step. This comprehensive guide will walk you through the process of checking mortgage status on a property in India, ensuring a safe and secure property transaction.

Understanding the Importance of Mortgage Checks

A mortgage is a legal agreement where a property is used as security for the repayment of a loan. If a property you’re interested in is already mortgaged, it could lead to legal disputes or financial losses. Therefore, conducting a thorough mortgage check is not just a precaution but a necessity.

The Role of CERSAI in Mortgage Verification

The Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) is a government-established organization under the Ministry of Finance. It maintains a comprehensive database of all properties mortgaged in India. This registry is a crucial tool for individuals and financial institutions to verify the mortgage status of a property.

Learn more about CERSAI’s Key Stakeholders & Ownership and its Function & Benefits in our detailed guide.

Step-by-Step Guide to Check Property Mortgage Online

1. Visit CERSAI’s Official Website: Go to CERSAI’s website.
2. Navigate to ‘Public Search’: Select the ‘Public Search’ tab on the homepage.
3. Choose Search Type: You have options like Asset-based search, Debtor-based search, etc. For a property-specific search, select ‘Asset-based search’.
4. Fill in Property Details: Enter details like survey number, plot number, building name, street name, state, city, and pin code.
5. Submit and View Results: After entering the details and the captcha, submit your query. The results will display the mortgage status of the property.

People Also Read: Online vs. Offline: Effective Strategies for Checking Indian Land Records

Additional Verification Methods

• Check Land Records: Visit the local sub-registrar office to access the property’s land records, which can provide insights into any registered mortgages.
• Consult Legal Experts: Engage with property lawyers or legal firms like Vakilsearch for professional guidance and thorough document verification.
• Builder’s NOC: If purchasing from a builder, request a No Objection Certificate (NOC) stating that the property is free from any dues or mortgages.

Understanding Property Registration

In India, property registration is governed by the Registration Act of 1908. Any transaction involving sale, gift, lease, or assignment must be registered if the property value exceeds Rs 100. This legal process provides a layer of security, affirming your ownership and revealing any encumbrances on the property.

Loans Against Property: A Quick Overview

Loans against property (LAP) are secured loans where the property acts as collateral. These loans can range up to Rs 250 crore with varying interest rates and tenures up to 20 years. Before proceeding with such loans, ensure the property’s mortgage status is clear.

Why Mortgage Checks are Crucial

• Avoid Legal Disputes: Uncovering hidden mortgages can prevent future legal battles.
• Financial Security: Ensures that your investment is safe and not liable for someone else’s debt.
• Transparent Transactions: Promotes transparency in property dealings, crucial for a healthy real estate market.

Learn more about the importance of legal verification in ensuring a transparent property transaction by reading our guide on Legal Verification of Property in India.

Safeguarding Your Property Investment

In summary, verifying the mortgage status of a property in India is a critical step in ensuring a safe and transparent real estate transaction. Utilize resources like CERSAI, consult legal experts, and thoroughly review property documents to protect your investment. Remember, a diligent approach today can save you from potential legal and financial troubles tomorrow.

FAQs on Mortgages on Property in India

Q1. Is it permissible for a builder to sell a property that has been mortgaged to a bank?

Ans1. Once a property is sold to a new owner, the builder relinquishes all rights to it. The new owner’s legal ownership is established upon payment of the necessary registration and stamp duties.

Q2. Does a builder retain the right to mortgage a flat after selling it?

Ans2. After a property sale is finalized, the builder loses any rights over it. The builder can only proceed with the sale after clearing any outstanding loans associated with the property.

Q3. What is the process for a builder to obtain a construction loan?

Ans3. Builders can secure construction loans from various financial institutions. To proceed with selling the property, a No Objection Certificate (NOC) from the lending bank is essential.

Q4. How can I verify if a property has been mortgaged by the builder to a bank?

Ans4. To ascertain if a property is mortgaged by the builder, you can either visit the local Sub Registrar’s office or check the property’s status on the CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest of India) website.

Q5. What should I do if I discover that the property has been mortgaged by the builder to a bank?

Ans5. In the event that a builder has mortgaged the property to a bank, you have the option to lodge a complaint with the Real Estate Regulatory Authority (RERA).